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Question 8 Nevland Corporation is considering the purchase of a machine that would cost $130,000...

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Accounting

Question 8

Nevland Corporation is considering the purchase of a machine that would cost $130,000 and would last for 6 years. At the end of 6 years, the machine would have a salvage value of $18,000. By reducing labor and other operating costs, the machine would provide annual cost savings of $44,000. The company requires a minimum pretax return of 19% on all investment projects. The net present value of the proposed project is closest to (Ignore income taxes.):

$38,040 $26,376 $74,902 $20,040

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